Angela Merkel has delivered an unusually sharp rebuke to the Greek government, accusing it of failing to implement necessary structural reforms while insisting a last-minute deal was still possible to keep it in the eurozone.

While the German chancellor, Angela Merkel, is publicly insistent on reaching a compromise deal that ensures Greece is saved from insolvency, expectation is rising – in Germany and elsewhere – of a Greek exit from the eurozone.

Last-ditch talks aimed at breaking the impasse between Athens and its international creditors have collapsed in acrimony with European Union officials dismissing Greece’s latest reform package as incomplete in a step that pushes the country closer to leaving the eurozone.

The pound posted its biggest one-day rise for almost eight years and the FTSE 100 share index jumped 3% on Monday, as traders reacted to an apparent shift in support towards a remain vote in Thursday’s EU referendum.